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the sociology of worker ownership – guest post by adria scharf

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In this guest post, Adria Scharf, director of the Curriculum Library for Employee Ownership, invites you to watch a video workshop that can help inform research, course syllabi, reading lists, and work with practitioners.  Read on for more info, including a special Q&A session at the 2020 ASA meeting.

“The Sociology of Worker Ownership

“Worker ownership” offers both an alternative to the dominant capitalist model of the employment relationship and a means to broaden the ownership of wealth in society.

In this video workshop, “The Sociology of Worker Ownership: New Data Sets and Research Approaches,” leading researchers introduce datasets and research approaches to study worker ownership and its effects:

The video opens with comments from Joyce Rothschild and Joseph Blasi, and is moderated by Adria Scharf.  Janet Boguslaw, Laura Hanson Schlachter, Nancy Weifek, and Joseph Blasi present data sets and research. Sarah Reibstein also contributed.

Alternatively, you can view the video (automatic cc: available) here: https://cleo.rutgers.edu/articles/the-sociology-of-worker-ownership-new-data-sets-and-research-approaches/

This Research & Policy Workshop was developed for the 2020 Annual Meeting of the ASA.  A live Q&A with the presenters will take place at the 2020 ASA virtual annual meeting on Tues., August 11th at 5:30 EDT.

Find a list of several datasets, with information on how to access them, here:

https://cleo.rutgers.edu/wp-content/uploads/2020/07/Datasets-on-Employee-Ownership-2.pdf

 

Written by katherinechen

August 4, 2020 at 6:46 pm

sase mini-conference cfp “Regulation, Innovation, and Valuation in Markets for Health and Medicines” – deadline extended to Fri., Jan. 24, 2020

SASE annual meeting submissions are currently open, and the submission deadline has been extended to Fri. Jan. 24, 2020!  (The 2020 annual meeting will be held July 18-20 at the University of Amsterdam in the Netherlands.)

For those studying organizations, innovation, health, medicines, markets, and/or inequality, I wanted to call attention to one of the mini-conference calls, organized by Kathryn Ibata-Arens and Etienne Nouguez.

Society for the Advancement of Socio-Economics (SASE) 2020, 18-20 July

University of Amsterdam

“Regulation, Innovation, and Valuation in Markets for Health and Medicines”

Mini-Conference Call for Papers

Conference Co-Organizers:

Kathryn Ibata-Arens, PhD

Vincent de Paul Professor of Political Economy

DePaul University

Etienne Nouguez, PhD

CNRS Researcher

Center For the Sociology of Organizations (SciencesPo/CNRS)

The world is experiencing rapid transformations in the development of new approaches to improving human health and the health of communities, healthcare provision, governance over the use and pricing of drugs and medicines, and medical innovations in biotechnology (genomics and stem cell-based therapies). For example, open innovation systems and sharing in the commons have introduced healing medicines and medical innovations (e.g. the Human Genome Project). At the same time, there is growing inequality in who gets access to medical care and medicines, and at what price.

 

Meanwhile, market competition has in part led to the opioid crisis of addiction in the United States, human subjects abuses in developing countries in the race to develop new drugs, and a decline in the discovery of radical new innovations in medicines for poor populations. This mini-conference aims to convene a group of related panels around issues in global health and medicines, to facilitate useful critical discussion and reflection on participants’ works-in-progress. Driving questions include:

 

-What theoretical advances are being made in understanding causal mechanisms in improving, or undermining human health and community health, for example, through state policy and firm and organizational strategy? What new frameworks and methods are being developed to identify key actors and explain actions (e.g. improving, or undermining health, broadly defined)?

 

-What is the evolving role of the state, healthcare systems and professions, and other actors (multilateral bodies, firms, non-profit organizations) in medical and medicine provision and innovation? Are we seeing a shift from traditional dominant blocks (North America and Europe) to new actors (Asia and the Global South)? Likewise, how have states and healthcare organizations been effective (or ineffective, indifferent) in the valuation and pricing of medicines (fair, equitable, and affordable access to life saving medicines)?

 

-What should be the responsibility, if any, of the global intellectual property rights regime as arbitrated by such powerful organizations as the World Trade Organization and global corporations in monitoring access and benefit sharing of profits resulting from research and development into new drugs and medicines?

 

-What are the roles for regulation and institutionalization of markets for such boundary-products between medicine and health food as probiotics, herbals, so-called nutraceuticals, and other dietary supplements – in ensuring the health and safety of consumers and patients?

 

-In what way is current research and policy aiming for “inclusive” innovation (e.g. in healthcare provision, new drug discovery) focused on distributive aspects versus stakeholder inclusion, or both (e.g. under the United Nations Sustainable Development Goals (SDGs))? What is the relative role for (social) entrepreneurs, large firms, and other actors?

 

Our mini-conference encourages submissions of papers exploring emerging frameworks and theories, as well as empirically rich original data from the developed and developing world and at various levels of analysis (e.g. local community, firm, state, multilateral institution). Scholars at all levels are welcome. In the spirit of innovation and creativity, the panels will have an interactive workshop format around discussant feedback and moderated audience participation. For more information, contact the co-organizers at medhealthSASE2020@gmail.com.

You can also download the full mini-conferenc call here: SASE2020HealthandMedicinemini-conferenceCFPK10-28-19

Grad students, post-docs, and other early career scholars, please also note: travel funding and a pre-conference workshop day are available, by a competitive selection process, for those who submit full papers for consideration and are accepted in a network or mini-conference.

Written by katherinechen

January 2, 2020 at 7:20 pm

state-of-the-field article “School choice’s idealized premises and unfulfilled promises” now available

Just before 2019 ends and we enter 2020, I’ve finally broken the superstition that whatever you do on New Years will be what you will do for the following New Years.  This year, a R&R converted into an accept and page proofs before New Years hit!

My co-authored paper with Megan Moskop is now available under the Organizations & Work section of Sociology Compass!  In this paper, using critical sociology and education research, we overview the variants of school choice systems in the US and their impacts on students, schools, and society.

Here’s the abstract:

School choice’s idealized premises and unfulfilled promises: How school markets simulate options, encourage decoupling and deception, and deepen disadvantages

Abstract

In school choice systems, families choose among publicly funded schools, and schools compete for students and resources. Using neoinstitutionalist and relational inequality theories, our article reinterprets recent critical sociological and education research to show how such markets involve actors’ enacting myths; these beliefs and their associated practices normalized white, privileged consumption as a basis for revamping public education as market exchanges between schools and families. Proponents argue that choice empowers individuals, focuses organizations on improving quality, and benefits society more broadly by reducing inequality and segregation. We argue that such school choice myths’ excessive emphases on individual decision‐making and provider performance obscure the actual impacts of school choice systems upon people, organizations, and society. First, rather than enlarging alternatives that families can easily research, select, and (if needed) exit, school choice systems often simulate options, especially for disadvantaged populations. Second, rather than focusing schools’ efforts on performance, innovation, and accountability, they can encourage organizational decoupling, homogeneity, and deception. Third, rather than reducing societal harms, they can deepen inequalities and alienation. Future research should examine both how markets are animated by bounded relationality—routines that enable them to form, maintain, and complete exchanges with organizations—and how activism can challenge marketization.

Please consider assigning this state-of-the-field article in your sociology of education, inequality, economic sociology, and/or organizations courses!  (If your institution doesn’t have access to Sociology Compass, please contact me directly for a copy.)

This paper began when Megan approached me during a March 2018  Future Initiatives “Publics, Politics, and Pedagogy: Remaking Higher Education for Turbulent Times” event at the Graduate Center.  After hearing me talk on a faculty panel about my research interests, Megan asked whether we could do an informal reading group on school choice readings.  We exchanged emails and agreed to meet in person to discuss readings.

At the time, Megan was working on her masters classes and thesis in urban education at the CUNY MALS program.  She was looking for a way to manage her growing collection of citations as she analyzed her past experiences with teaching 8th graders and their families about how to participate in the mandatory school choice market in NYC .

As a new entrant to research on learning and schools through my on-going ethnography of a democratic school, I had the sense that whatever was happening in the insurance market for older adults seemed to exist in other emerging markets for other age groups.  To understand the education options in NYC, I had attended a few NYC Dept. of Education and other orientations for families on how to select pre-K and higher program.  I found these experiences comparable to my observations of orientations for professionals and older adults about enrolling in Medicare: palpable waves of anxiety and disorientation were evident in the reactions and questions from these two differently aged audiences to workshops about how they were supposed to act as consumers felt similar.  I thus became interested in learning about research on the comparable school choice market for my ethnographic research on how intermediary organizations try to orient consumers to the health insurance market.  (Indeed, a side benefit of this collaboration was that the school choice readings helped amplify my development of the bounded relationality concept that ultimately appeared in Socio-Economic Review.)

Megan and I met regularly discuss readings that Megan had suggested and I had found through literature searches in sociology.  After several of these meetings, I raised the possibility of writing a state-of-the-field overview article.  Working on this draft helped us keep track of what we had learned.  It also helped us understand how to map existing research and to identify a void that our respective expertises and writing could address: synthesizing critical studies emerging from organizations and education.   For Megan, I hoped that this experience would give her a behind-the-scenes look at the academic production of research, so that she could decide whether to head this direction.

As we read more about school choice, I realized that we hadn’t come across a chart mapping the types of school choice systems currently in operation.  Megan thus worked hard at developing a table that describes and compares different types of school choice systems.  (In my opinion, this paper’s table is a handy first step for those trying to understand the school choice landscape.)

Meanwhile, I focused on applying an organizational framework to categorize research from the sociology of education and education fields.  As we worked on the drafts in response to writing group and reviewers’ and Sociology Compass section editor Eric Dahlin’s comments, we also realized that no one had systemically broken down the impacts of using market practices to distribute public goods across levels of individual persons, organizations, and society at large.

Along the way, thanks to Megan’s connections to education and activism, we got to learn directly from people about on-going activism and research.  For instance, youth organization IntegrateNYC sent representative Iman Abdul to talk to my “Future of NYC” honors college students about efforts to racially integrate NYC public schools.  Megan and I also attended Kate Phillippo’s talk about her research on school choice in Chicago from her latest book, A Contest Without Winners: How Students Experience Competitive School Choice (2019, University of Minnesota Press).

In all, writing this paper has been a great journey with a fun and insightful collaborator.  Had you asked me back in spring 2018 what the outcome of presenting at a CUNY event would have been, I could not have predicted this.  I am forever grateful that Megan came to talk with me!

Happy New Years, readers!  May the new year bring you joy, happiness, and health.

 

“Talk with your family about [Medicare] Part D over Thanksgiving dinner”: How markets require bounded relationality

 

ObamapardonsWhiteHouseTurkey2014

Question: What do the following three scenarios have in common?

Scenario A.  Congrats, you’re turning 65 years old!

You’re turning 65 years old.  In the US, if you have worked enough units, you are eligible for Medicare; you must select health insurance by choosing among traditional Medicare and HMO plans.  You also need to choose insurance that will cover  your current or anticipated prescription medications.  Depending on where you live, this could involve comparing around 50 different plans.

You start by consulting the Medicare booklet and wading through the flood of mail from insurance providers.  Despite this information, you’re having difficulties understanding the differences among plans and determining how much plans will charge for your medications.  Moreover, you’re not quite sure which medications that you’ll need in the upcoming year.  Each year after this, you’ll have an almost two-month-long window for making these decisions – a period that is happening now, ending Dec. 7.

If you have a long life, you’ll have plenty of practice working with this market.  How do you select a plan appropriate to your needs right now and then in the future?

Scenario B.  Congrats, you’re getting ready to enter high school!

You are a student at a NYC public middle school.  Since students are not automatically assigned to public high schools, you and your family must choose from among 750 programs and rank order your choices.  (If you are two years old or older, your parents must do the same for public pre-K and kindergarten school programs.)  To learn about your options, you can look at a directory of descriptions of these programs and then research each school online.  If possible, you and your family will also attend information fairs and schools’ open houses and tours, where you might be asked to fill out additional forms or leave your information.

Some schools have different criteria for what kinds of prospective students they prioritize, and most selective programs don’t provide rubrics for how they rank prospective students – information crucial for ascertaining your chances of acceptance.  After you submit up to 12 rank-ordered choices, an algorithm, modelled after a medical residency matching program designed by a economist, will generate a match based on schools’ priorities and your listed options.  And, btw, charter schools and private schools have their own admissions processes and admissions deadlines.

How do you choose and rank public high school programs?  Should you try to maximize your choices by also applying to charter schools and, if you have the financial resources, private schools?

Scenario C.  Congrats, you’re rich!

You have amassed enviable, immense wealth.   But, your mattress is bursting, and you distrust regular banking.  And, for whatever reason, you’re not fond of having the state taking a portion to support the common good, social insurance, military spending, etc.  Thinking ahead, you worry about your family having unfettered access to your financial legacy; relatives might fritter away that wealth!  Also, you have a few relationships that other family members don’t (yet) know about, and you want to make sure that those loved ones are also taken care of after your inevitable passing.  So, what to do?

Answer: Most likely, you’ll need what I call “bounded relationality” to assist you with entering complex markets and making exchanges.   To explain what bounded relationality is, I’ll preview excepts from my advance, online first article “Bounded relationality: how intermediary organizations encourage consumer exchanges with routinized relational work in a social insurance market.”

The bounded relationality concept combines two of my favorite theories: (1) economic sociology’s relational work by Viviana Zelizer, Fred Wherry, and Nina Bandjel* and (2) Herbert Simon’s theory about how organizations compensate for people’s bounded rationality, or difficulties with making decisions.

During several years of my research on organizations that support older adults, I observed workshops and meetings for organizational representatives and professionals, including social workers, on topics such as how to select Medicare insurance plans.

At one of these workshops, a representative from the Centers for Medicare & Medicaid Services, described officials’ hopes that families would discuss prescription plans at family get-togethers: ‘We tried to say, “Talk with your family about [Medicare] Part D over Thanksgiving dinner,” but we don’t know if people did.’   His comment revealed how much the market relies upon relational work, or connections formed and sustained with other persons (Zelizer 2012) and organizations.

Using observations of US governmental, advocacy, and human service organizations’ (GAHSOs) talks, I show how these intermediary organizations endorsed “bounded relationality” when teaching conventions for participating in the market of social insurance.  Unlike conventional consumer goods and services markets, insurance options are difficult to evaluate and exchanges are challenging to switch.  Decisions are also consequential, with suboptimal decisions impacting personal well-being and requiring support or intervention by family members, if they are available.

Read more about bounded relationality after the jump: Read the rest of this entry »

book spotlight: beyond technonationalism by kathryn ibata-arens

At SASE 2019 in the New School, NYC, I served as a critic on an author-meets-critic session for Vincent de Paul Professor of Political Science Kathryn Ibata-Arens‘s latest book, Beyond Technonationalism: Biomedical Innovation and Entrepreneurship in Asia.  

Beyondtechnonationalismcover

Here, I’ll share my critic’s comments in the hopes that you will consider reading or assigning this book and perhaps bringing the author, an organizations researcher and Asia studies specialist at DePaul, in for an invigorating talk!

“Ibata-Arens’s book demonstrates impressive mastery in its coverage of how 4 countries address a pressing policy question that concerns all nation-states, especially those with shifting markets and labor pools.  With its 4 cases (Japan, China, India, and Singapore),  Beyond Technonationalism: Biomedical Innovation and Entrepreneurship in Asia covers impressive scope in explicating the organizational dimensions and national governmental policies that promote – or inhibit – innovations and entrepreneurship in markets.

The book deftly compares cases with rich contextual details about nation-states’ polices and examples of ventures that have thrived under these policies.  Throughout, the book offers cautionary stories details how innovation policies may be undercut by concurrent forces.  Corruption, in particular, can suppress innovation. Espionage also makes an appearance, with China copying’s Japan’s JR rail-line specs, but according to an anonymous Japanese official source, is considered in ill taste to openly mention in polite company. Openness to immigration and migration policies also impact national capacity to build tacit knowledge needed for entrepreneurial ventures.  Finally, as many of us in the academy are intimately familiar, demonstrating bureaucratic accountability can consume time and resources otherwise spent on productive research activities.

As always, with projects of this breadth, choices must made in what to amplify and highlight in the analysis.  Perhaps because I am a sociologist, what could be developed more – perhaps for another related project – are highlighting the consequences of what happens when nation-states and organizations permit or feed relational inequality mechanisms at the interpersonal, intra-organizational, interorganizational, and transnational levels.  When we allow companies and other organizations to, for example, amplify gender inequalities through practices that favor advantaged groups over other groups, what’s diminished, even for the advantaged groups?

Such points appear throughout the book, as sort of bon mots of surprise, described inequality most explicitly with India’s efforts to rectify its stratifying caste system with quotas and Singapore’s efforts to promote meritocracy based on talent.  The book also alludes to inequality more subtly with references to Japan’s insularity, particularly regarding immigration and migration. To a less obvious degree, inequality mechanisms are apparent in China’s reliance upon guanxi networks, which favors those who are well-connected. Here, we can see the impact of not channeling talent, whether talent is lost to outright exploitation of labor or social closure efforts that advantage some at the expense of others.

But ultimately individuals, organizations, and nations may not particularly care about how they waste individual and collective human potential.  At best, they may signal muted attention to these issues via symbolic statements; at worst, in the pursuit of multiple, competing interests such as consolidating power and resources for a few, they may enshrine and even celebrate practices that deny basic dignities to whole swathes of our communities.

Another area that warrants more highlighting are various nations’ interdependence, transnationally, with various organizations.  These include higher education organizations in the US and Europe that train students and encourage research/entrepreneurial start-ups/partnerships.  Also, nations are also dependent upon receiving countries’ policies on immigration.  This is especially apparent now with the election of publicly elected officials who promote divisions based on national origin and other categorical distinctions, dampening the types and numbers of migrants who can train in the US and elsewhere.

Finally, I wonder what else could be discerned by looking into the state, at a more granular level, as a field of departments and policies that are mostly decoupled and at odds. Particularly in China, we can see regional vs. centralized government struggles.”

During the author-meets-critics session, Ibata-Arens described how nation-states are increasingly concerned about the implications of elected officials upon immigration policy and by extension, transnational relationships necessary to innovation that could be severed if immigration policies become more restrictive.

Several other experts have weighed in on the book’s merits:

Kathryn Ibata-Arens, who has excelled in her work on the development of technology in Japan, has here extended her research to consider the development of techno-nationalism in other Asian countries as well: China, Singapore, Japan, and India. She finds that these countries now pursue techno-nationalism by linking up with international developments to keep up with the latest technology in the United States and elsewhere. The book is a creative and original analysis of the changing nature of techno-nationalism.”
—Ezra F. Vogel, Harvard University
“Ibata-Arens examines how tacit knowledge enables technology development and how business, academic, and kinship networks foster knowledge creation and transfer. The empirically rich cases treat “networked technonationalist” biotech strategies with Japanese, Chinese, Indian, and Singaporean characteristics. Essential reading for industry analysts of global bio-pharma and political economists seeking an alternative to tropes of economic liberalism and statist mercantilism.”
—Kenneth A. Oye, Professor of Political Science and Data, Systems, and Society, Massachusetts Institute of Technology
“In Beyond Technonationalism, Ibata-Arens encourages us to look beyond the Asian developmental state model, noting how the model is increasingly unsuited for first-order innovation in the biomedical sector. She situates state policies and strategies in the technonationalist framework and argues that while all economies are technonationalist to some degree, in China, India, Singapore and Japan, the processes by which the innovation-driven state has emerged differ in important ways. Beyond Technonationalism is comparative analysis at its best. That it examines some of the world’s most important economies makes it a timely and important read.”
—Joseph Wong, Ralph and Roz Halbert Professor of Innovation Munk School of Global Affairs, University of Toronto
Kathryn Ibata-Arens masterfully weaves a comparative story of how ambitious states in Asia are promoting their bio-tech industry by cleverly linking domestic efforts with global forces. Empirically rich and analytically insightful, she reveals by creatively eschewing liberalism and selectively using nationalism, states are both promoting entrepreneurship and innovation in their bio-medical industry and meeting social, health, and economic challenges as well.”
—Anthony P. D’Costa, Eminent Scholar in Global Studies and Professor of Economics, University of Alabama, Huntsville
For book excerpts, download a PDF here.  Follow the author’s twitter feed here.

markets, opportunity, and justice

At the Winter commencement at Indiana University, one of our speakers, tech business leader Fred Luddy, made a very interesting comment. Basically, he said that life in a market isn’t fair, but there are always more opportunities. I am not sure if he appreciated the depth of the remark, but if you reflect upon it, you realize that it merits a lot of reflection.

Let’s start with the typical approaches to thinking about whether markets are just forms of interaction.  The classic Nozickian position is that markets are just because they are voluntary. If you voluntarily by or sell your property or labor, then the resulting state is just. The critics raise multiple objections. For example, many people think that extreme inequality is either inherently unfair (i.e., only mild deviations from equality are acceptable) or that inequality has negative consequences (e.g., perhaps the very wealthy can unfairly influence government).

I think the most profound response to the critics comes from Hayek, who argued that the “social justice” critique of markets misses an important point. Namely,  Hayek argued that to critique the market based social order you must assume that you know what the right order is and how to make it happen, and that’s a tall order. Still, Hayek’s counter-point to the social justice leaves a lot of people, including myself, a little cold.

Why? Maybe it is unwise to believe that some mystical central planner can know the “right way” to organize society, but it does seem to be the case that the market economy tolerates a lot of things that appear prima facie unjust. A lot of people can lose their jobs through no fault of their own, such as in a recession. Or there can be persistent discrimination against certain classes of people, such as women or ethnic minorities.

In my view, this observation – that markets tolerate substantial levels of injustice – is reasonable. This brings me back to Luddy’s point. What I think he was trying to communicate, in the context of a graduation speech, is that the valuable thing about markets isn’t that they create justice. Rather, they create opportunities you can pursue after you have experienced injustice. In his speech, for example, he described how a business partner had used a stolen identity to embezzle millions of dollars – which he had to pay back to investors. There was nothing just about the situation, but the interesting thing is that he still had more opportunities and could thus move on with this life.

The big idea is that a narrow Nozickian justice and other broader forms of justice are different and that markets are actually fairly good at the former but not the latter. If all we ask if that a chain of interactions be voluntary, then markets fit the bill. If we ask that all possible consequences be desirable, or that all bad actors are relentlessly suppressed and reformed, markets are definitely imperfect. But that doesn’t mean that markets should be rejected. Rather, Luddy’s comment indicates that they have a desirable trait that may promote justice along some margins. Economic opportunities, ranging from the modest taco truck to the next billion dollar start-up, are constantly being created. For many people who experience negative outcomes, they may be a way to move forward and that’s a good thing.

50+ chapters of grad skool advice goodness: Grad Skool Rulz ($4.44 – cheap!!!!)/Theory for the Working Sociologist (discount code: ROJAS – 30% off!!)/From Black Power/Party in the Street / Read Contexts Magazine– It’s Awesome!

Written by fabiorojas

December 28, 2017 at 6:45 am

what problems do people think antitrust is going to solve?

Last week, I asked why antitrust is having a moment (it’s continued, on Planet Money and elsewhere), and why Democrats are using radical language to make fairly modest proposals. In this post, I’m going to ask what problems people think antitrust is going to solve, anyway.

Certainly a lot of the current concern about antitrust comes from a broad sense that corporations are too economically and politically powerful, that our economy has been restructured in ways that make ordinary people worse off, and that massive tech companies are able to use our data in ways that we have little control over. That’s political antitrust. And those are totally real issues.

But I want to explore some new questions being raised that are not exactly within the current scope of economic antitrust, but that are still kind of speaking its language—that are pushing to change the antitrust technocracy, not up-end it. To recap, as it has been construed for the last thirty-plus years, the purpose of antitrust is to promote consumer welfare, generally by trying to keep firms from being able to raise and keep prices above a competitive level. The focus is consumers, and prices.

Increasingly, though, people at least adjacent to the space of antitrust expertise are making claims about economic problems they think are being caused by lax antitrust enforcement, or that antitrust should be addressing. And those proposals are worth keeping an eye on, because as hard as it might be to change the expert consensus, it’s still more likely than a new anti-monopoly movement. (Though the two could certainly reinforce each other.) I see these new arguments as falling into basically three categories.

Market power has effects we didn’t realize

Market power is the ability to keep prices above a competitive level (i.e. above marginal cost). Once upon a time, people thought there was a fairly close relationship between how concentrated a market is—that is, how many companies control what share of the market—and how much market power firms have. Since the 1970s, there has been much less of a presumption that concentration, on its own, indicates market power. That means that there’s been less concern about whether we’ve got four airlines controlling 70% of the U.S. market, or that four carriers control 99% of the U.S. wireless market.

Increasingly, though, people are raising flags about other problems that might result from market power. One of these is labor monopsony—the idea that firms have market power, but as purchasers of labor, not sellers of products, and that this is driving wages down. The Council of Economic Advisers put out a report last fall suggesting this might be happening, and Democrats’ mention of “bargaining power for workers” implies this is part of what they’re trying to address. There are related arguments about market power in supply chains and the emergence of “winner take most” industries that also suggest links between concentration or market power and wages.

In theory, monopsony can be handled within the current legal framework, though it is rarely addressed in practice. So developing arguments about the effects of market power on workers, and a legal framework for addressing that within antitrust, is one conceivable new direction for antitrust.

Others are arguing that market power can lead firms to attach undesirable conditions to products that make them lower quality, even as price remains the same. In particular, some scholars, including Nobel Laureate Joe Stiglitz, have framed privacy as an antitrust issue: the product may be free, but consumers have no choice about how their data is used (and in the case of platforms like Facebook, no equivalent competitors). Privacy is hard to address within a framework focused purely on price. But in Europe, competition policy is increasingly tackling privacy issues, and Germany is currently investigating whether Facebook’s dominant position is forcing consumers to give up their privacy without having an alternative choice.

Market power has causes we didn’t realize

The Atlantic just featured a story with the dramatic title, “Are Index Funds Evil?” The article discusses the rise of large institutional investors—index funds, though not only index funds—and what it means that, increasingly, big chunks of competitors in a specific market are actually owned by the same few corporations. It goes on to discuss work by José Azar, Martin Schmalz, and Isabel Tecu that finds that this common ownership enhances market power, and that airline ticket prices are 3-7% higher than they would be under separate ownership.

In this story, index funds were the hook, but it just as easily could have been framed around antitrust. In a way, common ownership was the original antitrust question: the big trusts of the late 19th century were not single-firm monopolies, but competitors that had turned over ownership to a group of trustees that made unified governance decisions. And while research in this area is still new and findings tentative, legal scholars are already making the case that antitrust law can cover the anticompetitive effects of these horizontal shareholdings. If this work continues to hold up, this seems potentially transformative.

Technological change is creating new threats to competition

Finally, a fair bit of the recent chatter is basically arguing, “it’s the technology, stupid.” The dynamics of competition change as more of the economy shifts to online platforms. Because of network effects, companies like Facebook, Google, Apple, and Amazon are hard to compete with—much of their value comes from their existing user base. And because they aren’t just selling products to consumers, but connecting consumers with producers, they aren’t acquiring market power in the traditional sense. Facebook and Google are free products, after all.

But the power of network effects means that they have a tendency towards monopoly. And the fact that the four largest companies by market capitalization are platforms suggests how central platforms have become to our economy.

So we have these new companies that have become very large, and that appear monopolistic, though they also create great value for consumers. From an antitrust perspective, they don’t really appear to be a problem, because they aren’t raising prices. And the history of rapid technological change over the past 25 years, including the rise and fall of a number of once-dominant platforms, raises the question of whether even platforms behaving in anticompetitive ways pose much of a long-term threat.

Recent scholarship, though, argues that monopolistic platforms are in fact anticompetitive, that it is a problem, and that current law is poorly equipped to handle. Lina Khan’s much-circulated note in the Yale Law Journal, for example, argues that 1) platforms encourage predatory pricing—generally seen as irrational (and thus not an issue) within antitrust law—because network effects encourage pursuit of growth over profit, and 2) platforms collect data on rivals that give them an unfair competitive advantage. These sorts of issues clearly fit within the broad scope of “protecting competition,” but don’t fit easily with a consumer welfare, market power conception of antitrust.

Changing that would be a significant project, but if we have an economy that is dominated by firms whose potentially anticompetitive activity is essentially beyond the scope of antitrust, there’s not much left to antitrust. And again, the massive fine the E.U. just levied on Google—for favoring its own shopping service, consisting of companies that pay Google to be on it, over competitors in search results—suggests what this could look like. So far, the U.S. has not demonstrated much enthusiasm about expanding antitrust in this direction. But it’s not inconceivable that it could happen, and it could be done within a framework that was focused solely on competition, if not only on consumer welfare.

Again, all these challenges to the current antitrust framework are at least in the ballpark of its conversation, even if they would require pushing the law in new directions or advancing the acceptance of new economic theories. And they are not the only arguments that are in play here. For example, the question of whether inequality is facilitated by concentration or market power, or whether it has become such a central economic problem that antitrust should try to address it, have prompted enough discussion that two leading antitrust scholars have felt the need to argue that antitrust should leave inequality alone.

Unlike political antitrust, which would probably require a social movement to move it forward, these antitrust arguments have the potential to gain traction without necessarily requiring legislation or a revolution against the current antitrust regime. The 1970s shift toward Chicago-style antitrust happened, to a considerable extent, because the old economic framework seemed increasingly inadequate for explaining the world people found themselves in. As the current framework comes to seem similarly dated, this could be another moment when such change is possible.

Written by epopp

August 10, 2017 at 1:33 pm

the democrats can’t decide how radical they want to be on antitrust

The other day I wrote about the current moment in the spotlight for antitrust. (Here’s the latest along these lines from Noah Smith.) Today I’ll say something about the new Democratic proposals on antitrust and how to think about them in terms of the larger policy space.

The Democrats are basically proposing three things. First, they want to limit large mergers. Second, they want active post-merger review. Third, they want a new agency to recommend investigations into anticompetitive behavior. None of these—as long as you don’t go too far with the first—is totally out of keeping with the current antitrust regime. And by that I mean however politically unlikely these proposals may be, they don’t challenge the expert and legal consensus about the purpose of antitrust.

But the language they use certainly does. The proposal’s subhead is “Cracking Down on Corporate Monopolies and the Abuse of Economic and Political Power”. The first paragraph says that concentration “hurts wages, undermines job growth, and threatens to squeeze out small businesses, suppliers, and new, innovative competitors.” The next one states that “concentrated market power leads to concentrated political power.” This is political language, and it goes strongly against the grain of actual antitrust policy.

Economic antitrust versus political antitrust

Antitrust has always had multiple, competing purposes. The original Progressive-Era antitrust movement was partly about the power of trusts like Standard Oil to keep prices high. But it was also about more diffuse forms of power—the power of demanding favorable treatment by banks, or the power to influence Congress. That’s why the cartoons of the day show the trusts as octopuses, or as about to throw Uncle Sam overboard.

The Sherman Act (1890) and the Clayton Act (1914), the two major pieces of antitrust legislation, are pretty vague on what antitrust is trying to accomplish. The former outlaws combinations and conspiracies in restraint of trade, and monopolizing or attempt to monopolize. The latter outlaws various behaviors if their effect is “substantially to lessen competition, or to tend to create a monopoly.” The courts have always played the major role in deciding what that means.

Throughout the last century, the courts have mostly tried to address the ability of firms to raise prices above competitive levels—the economic side of antitrust. For the last forty years, they have focused specifically on maximizing consumer welfare, often (though not always) defined as allocative efficiency. Since the late 1970s, this has been pretty locked in, both through court decisions, and through strong professional consensus that makes antitrust officials very unlikely to challenge it.

Before the 1970s, though, two things were different. For one thing, the focus was more on protecting competition, and less on consumer welfare per se (the latter was assumed to follow from the former, and was thought of a little more broadly). For another, the courts sometimes took concerns into account other than keeping prices low.

The most common such concern was the fate of small business. Concern for small business motivated the Robinson-Patman Act of 1936, which prohibited anticompetitive price discrimination. It was clear in the Celler-Kefauver Act of 1950, which restricted mergers out of fear that chain stores would eliminate local competition. And the courts acknowledged it in cases like Brown Shoe (1962), which prevented a merger that would have controlled 7% of the shoe market by pointing to Congress’s concern with preserving an “economic way of life” and protecting “local control of industry” and “small business.”

Today, Brown Shoe is seen as part of the bad old days of antitrust, when it was used to protect inefficient small businesses and to pursue confused social goals. This is a strong consensus position among antitrust experts across the political spectrum. While no one thinks that low prices for consumers are the only thing worth pursuing in life, they are the appropriate goal for antitrust because they make it coherent and administrable. Since those experts’ views dominate the antitrust agencies, and have been codified into law through court decisions, they are very resistant to change.

The Democrats’ proposal: radical language, incremental proposals

So when the Democrats start talking about “the abuse of economic and political power,” the effects of concentration on small business, and limiting mergers that “reduce wages, cut jobs, [or] lower product quality,” they are doing two things. First, they are hearkening back to the original antitrust movement, with its complex mix of concerns and its fear of unadulterated corporate power.

Second, they are very much talking about political antitrust, and political antitrust is deeply challenging to the status quo. But their actual proposals are considerably tamer than the fiery language at the beginning, and are structured in a way that doesn’t push very hard on the current consensus. New merger guidelines could make some difference around the margins. Post-merger review would definitely be good, since there’s currently no enforcement of pre-merger conditions that firms agree to, and no good way to figure out which merger approvals had negative effects. I have a hard time seeing a new review agency having much effect, though, since it’s just supposed to make recommendations to other agencies. Even I don’t like bureaucracy that much.

So my read on this is that the Democrats feel like they need a new issue, and it needs to look like it helps the little guy, and they want to sound like populist firebrands. But when you get down to the nitty gritty, they aren’t really so interested in challenging the status quo. That is, basically, they’re Democrats. Still, that the language is in there at all is remarkable, and reflects a changing set of political possibilities.

Next time I’ll look at some of the problems people are suggesting antitrust can solve. Because there are a lot of them, and they’re a diverse group. Tying them together under the umbrella of “antitrust” gives an eclectic political project some nominal coherence. But is it politically practicable? And could it actually work?

Final note: If you are interested in the grand historical sweep of antitrust in capitalism, I recommend Brett Christophers’ The Great Leveler. Among other things, he totally called the emerging wave of interest before it actually happened. Sometimes the very long lens is the right one to use.

Written by epopp

August 3, 2017 at 3:04 pm

why antitrust now?

Antitrust is having a moment. A couple of years ago, with the possible exception of complaining about never-ending airline mergers, no one paid attention to antitrust debates. Today, it’s all over the place. A few months ago, it was the Economist proclaiming “America Needs a Giant Dose of Competition.” Last month it was Amazon and Whole Foods. And now antitrust has become a key plank of the new Democratic platform.

I’ve been thinking about this for a while, but this antitrust explainer written by Matt Yglesias yesterday (which is generally quite good) motivated me to put fingers to keyboard. So I’m going to break this reflection up into three parts: Why antitrust now? What does the new antitrust debate mean? And what would it take for it to succeed? Today, I’ll tackle the first.

At one level, the rise of antitrust interest is just a perfect convening of streams, in the Kingdon sense. A problem (or loose collection of problems) rises to public attention, people are already out there advocating a solution, even if so far unsuccessfully, and—the moment we’re in now—politicians have the motivation to grab that solution and turn it into policy, or at least a platform. It’s just about timing, and it’s not predictable.

At the same time, I think we can unpack a couple of different factors that help us think about “why now”. Some of this is covered in the Yglesias piece. But there are a few things I’d add, and some different angles I’d highlight. So without further ado, here are four reasons antitrust is suddenly getting attention.

1. It’s a reaction to a change in objective conditions.

There is a degree of consensus that market concentration is increasing across the economy. Even if you don’t think concentration is a problem, it wouldn’t be surprising that an increase would lead some people to challenge it, and make media more open to hearing that claim. This is probably a contributing factor. But market concentration has been increasing for a long time, and the link between concentration and exercise of power, whether market power or political power, is at best complicated. I don’t think the rise in concentration explains much of the antitrust attention.

Other phenomena are emerging that are objectively new, and raise new questions about how to govern them. Amazon now controls 43% of internet retail sales in the U.S. That’s astonishing, and at least a little alarming. But we’ve now seen several generations of various platforms (operating systems, browsers, social networks) rise to dominance and sometimes fall, mostly without a lot of antitrust attention—Microsoft, at the turn of the millennium, being the significant exception. These objective changes are a necessary but definitely not sufficient for public attention to rise.

2. New actors are organizing around this issue.

A lot of the noise around antitrust is coming from a relative handful of people. Until the Democrats came on board, it was Elizabeth Warren on the political side, and before that Zephyr Teachout, the Fordham law professor who gave Andrew Cuomo a run for his money in 2014.

On the think tank side, as Yglesias notes, it’s the Open Markets Program at New America. Fellow Lina Khan, once of the Teachout campaign, landed an NYT op-ed on Amazon and Whole Foods. Fellow Matt Stoller’s Atlantic article on antitrust, “How Democrats Killed Their Populist Soul,” got a lot of attention when it came out last fall. Barry Lynn, who runs the program, has been working on this issue for a decade.

The Roosevelt Institute is the other significant player in this space. (Here’s a good, if now difficult to read, piece from last summer explaining the history of Roosevelt.) Marshall Steinbaum and others have made the case for a range of antitrust issues on a variety of grounds, and the influence of both these organizations on the new Democratic congressional platform is clearly visible.

There’s no question that this kind of policy advocacy—talking to policymakers, writing articles and op-eds—is making a difference. But its impact has been facilitated by two other things.

3. The space of expertise is changing in unexpected ways.

Antitrust policy is a space heavily dominated by experts. Congress rarely touches antitrust issues. The public rarely pays attention. Presidents generally talk a good antitrust game, and may care more or less about appointing antitrust officials who will pursue a particular policy line. But for the most part, antitrust is dominated by the lawyers and economists who serve in the Antitrust Division and FTC, consult on antitrust cases, write academic articles, and a handful of whom become judges.

And there is bipartisan consensus among these experts that concentration isn’t generally a problem. Markets are contestable. Predatory pricing is irrational, because firms know that if they drive out competitors then jack up prices, they’ll just attract some new entrant into the market. There’s really no point. Yes, there may be a little more antitrust enforcement among Democrats than Republicans. But it’s a game played “between the 45 yard lines.” As Richard Posner said recently, “Antitrust is dead, isn’t it?”

But this space is changing in interesting ways. The change doesn’t seem to be coming from the antitrust community itself, exactly. But it’s coming from people with the academic clout to be taken seriously.

From one direction, you have people like Jason Furman and Joseph Stiglitz making arguments about labor market monopsony contributing to lower wages and arguing that economic changes require new kinds of antitrust solutions. From another, you have Luigi Zingales overseeing an effort (at the University of Chicago’s Stigler Center, no less) to advocate for stronger antitrust, calling his position “pro-market” rather than “pro-business”. Zingales’ efforts are also notable for bringing in historians, political scientists and other experts usually not privy to the antitrust policy conversation.

None of these people work primarily on antitrust issues or even industrial organization, but they have the status to be taken seriously even if they are not among the usual suspects of antitrust. Their novel arguments have the capacity to shift the expert consensus about antitrust—either mildly, as in Furman’s arguments about the importance of labor monopsony (which don’t require a radical rethinking of the current approach), or more radically, as in Zingales’s advocacy of an antitrust that takes political power seriously.

I’ll discuss these changes more in the next couple of posts, but in terms of explaining “why antitrust now,” the point is that these insider/outsider dissenters are amplifying new voices and new issues, and thus contributing to the current wave of attention.

4. The cultural moment is right for other reasons.

If there’s one belief that seems to unite Americans across the political spectrum these days, it’s that the game is rigged against the ordinary person. For the many Americans who think big business is doing at least some of the rigging, this produces a new openness to arguments about concentration and corporate control. As much as anything else, I think this explains the current interest in antitrust. People are receptive to arguments that purport to explain why they’re being screwed.

Antitrust is a protean issue. It can channel many different types of fears and at least theoretically respond to many different kinds of problems. Whether it can do so effectively, and whether antitrust is the right tool for the job, is a different question. In my next post I’ll try to unpack some of those different problems, why they’re now being linked together under the umbrella of “antitrust,” and draw on some antitrust history to think about what current efforts mean.

Written by epopp

August 1, 2017 at 1:51 pm

do we need illegal firms?

Over at Harvard Business Review, Benjamin Edelman argues that Uber’s ultimate problem isn’t bad corporate culture. It’s being an organization that is premised on being illegal. To quote:

But I suggest that the problem at Uber goes beyond a culture created by toxic leadership. The company’s cultural dysfunction, it seems to me, stems from the very nature of the company’s competitive advantage: Uber’s business model is predicated on lawbreaking. And having grown through intentional illegality, Uber can’t easily pivot toward following the rules.

And:

Uber’s biggest advantage over incumbents was in using ordinary vehicles with no special licensing or other formalities. With regular noncommercial cars, Uber and its drivers avoided commercial insurance, commercial registration, commercial plates, special driver’s licenses, background checks, rigorous commercial vehicle inspections, and countless other expenses. With these savings, Uber seized a huge cost advantage over taxis and traditional car services. Uber’s lower costs brought lower prices to consumers, with resulting popularity and growth. But this use of noncommercial cars was unlawful from the start. In most jurisdictions, longstanding rules required all the protections described above, and no exception allowed what Uber envisioned. (To be fair, Uber didn’t start it — Lyft did. More on that later on.)

Edelman goes on to make a number of fair points: by operating illegally, employees are at risk and it encourages poor corporate culture.

But here’s another take. What if some industries need to be developed through illegality? For example, right now in the US, many marijuana firms are operating in a de facto state of illegality, with Federal law (which supersedes state law) outlawing recreational marijuana. Despite this problem, many dispensaries remain committed to marijuana distribution and they innovate. My conjecture is that their practices will set the standards for the future recreational marijuana industry. Even in Edelman’s article, he refers to Napster, which illegally made music easier to distribute. They broke the law, but created a new market in the process.

In these three cases (Uber, Napster, US marijuana distributors), the market was expanded and developed through illegality. This suggests to me that Edelman’s point is good – firms working illegally may be saddled with too many problems. But it elides an even bigger point. Various regulations and state granted monopolies create needless zones of illegality. For some markets to develop, somebody has “break the rules to make the rules.” In many cases, that can be a good thing.

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Written by fabiorojas

June 28, 2017 at 4:12 am

independent book stores are back!!! a guest post post by clayton childress

Clayton Childress is an Assistant Professor of Sociology at University of Toronto. While making the case for examining the relationships between fields and reuniting the sociological studies of production and reception, Under the Cover empirically follows a works of fiction from start to finish: all the way from its creation, through its production, selling, and reading.

Three Reasons Independent Bookstores Are Coming Back

 A couple weeks ago, Fabio had a post about the recent rise in brick-and-mortar independent bookstores, suggesting that perhaps they have successfully repositioned themselves as “artisanal organizations” that thrive through the specialized curation of their stock, and through providing “authentic,” and maybe even somewhat bespoke, book buying experiences for their customers.

There’s some truth to this, but in my forthcoming book, I spend part of a chapter discussing the other factors. Here’s several of them.

Why the return:

1)     The Demise of the Borders Group, and Shifting Opportunity Space in Brick-and-Mortar Bookselling.

This graph from Statista in Fabio’s original post starts in 2009, lopping off decades of retrenchment in the number of American Bookseller Association member stores. Despite the recent uptick, independent bookstores have actually declined by about 50% since their peak. More importantly, it’s worth noting that even in the graph we see independent bookstores mostly holding steady from 2009 to 2010, with their rise starting in 2011. Why does this matter? As Dan Hirschman rightly hypothesizes in the comments section of the original post, the bankruptcy and liquidation of the Borders Group began in February of 2011, and is key to any story about the return of independent bookstores. To put some numbers to it, between 2010 and 2011 the Borders Group closed its remaining 686 stores, and between 2010 and 2016 – after spending decades in decline –651 independent bookstores were opened. It’s a pretty neat story of nearly one-to-one replacement between Borders and independents since 2011.*

Yet, if anything, this isn’t as much a surprising story about the continued prevalence of independent bookstores themselves, but rather, a story about the continued prevalence of paper as a medium through which people like to consume the types of books that are mostly sold in independent bookstores. When Borders liquated people didn’t predict that independents would take their place, but that’s because they had mostly misattributed the bankruptcy of Borders to the rise of eBook technology and Amazon. That story was never quite right, though. Borders last year of turning a profit, 2006, mostly predated these supposed causal factors. Instead, Borders’ rise to prominence came through a competitive advantage in their back-end logistics operations, which they then never really updated, and by the mid-2000s they had turned from a market leader to a market trailer. Borders also invested more floor space in selling CDs right when that market started to decline, and then turned that floor space into the selling of DVDs right when that market started to decline – their stores were always too big, and they seemed to have a preternatural ability to keep on filling them with the wrong things. As for the rise of Amazon and online book sales in the decline of Borders, they did play a role, but not the one that people think. In perhaps one of the least prescient moves in the history of American bookselling, as online bookselling started to take off, Borders decided to not spend resources investing in that market, and instead contracted their online bookselling out to Amazon, helping them on their way to dominance of the market. Oh, you dummies.

So, while it was mostly back-end distribution problems, stores that were too big, and a series of bad bets that tanked Borders, its demise was never really about a lack of demand for print books, which allowed independents to fill that market space after Borders disappeared. For independent used book stores (which have always had as much of a supply problem as a demand problem), advances in back end supply systems have in fact made them more viable.

2)     Independent Bookstores are the Favored Trading Partners of the Publishing Industry.

Starting during the Great Depression, in order to keep bookstores in business, book publishers began letting them return any (damaged or undamaged) unsold books, meaning that for nothing more than the cost of freight bookstores could pack books up to the ceiling without taking on much financial risk on stocking decisions (if you’ve ever been curious why so many bookstores seem so overstuffed with product, here’s your answer).

It was the beginning of a long history of cooperation between publishers and sellers, and the cooperation has never been more friendly than it is between publishers and independent stores. Publishers and bookstores want the same thing: for people to go into bookstores looking for the books that are actually in stock. With about 300,000 new industry-published books coming out per year, that’s no small feat. For this reason, cooperation between publishers and independents is key, and they rely on an informal system of gift exchange, the details of which I go into in my book.

With the rise of chain bookstores such as Walden, Crown, Barnes & Noble, and Borders, this cooperation became formalized as “co-op,” a system in which publishers nominate their books, and if they are chosen for co-op by the seller, then pay to have their books placed on front tables and endcaps across the country. The basic shorthand is that it costs a publisher about a dollar per copy to get their book on a front table at Barnes & Noble, which is very roughly the same amount that an author gets paid per copy to write the book in her advance (talk to any publisher for long enough and they’ll grind their teeth while noting this).

From the cooperation system with independents the chains developed “co-op”, but a publisher’s relationship with Amazon is closer to coercion. With the chains, publishers can decide to nominate for “co-op” or not, but as soon as publisher sells a book on Amazon they’ve already entered into an enforced “co-op” agreement, in which usually around 6-8% of all of their revenue from selling on Amazon is then withheld, and must be used to advertise on Amazon for future titles. This tends to gets talked about less as “coercion”, and more as “just the way things are” –it’s what happens when you have a retailer that dominates the space enough to set its own terms.

As a result, while book publishers like independent bookstores because they believe them to be owned and staffed by true book lovers (Jeff Bezos was famously disinterested in books when launching Amazon – books are just fairly durable objects of standard size and shape and therefore ship well, making them a good test market for the early days of ecommerce), they also do everything they can to support independent bookstores because their trading terms with them are most favorable to publishers. In their most extreme forms, we can see publishing professionals collaborate in opening their own independent bookstores, but more generally, they engage in subtler forms of support: getting their big name authors to smaller places, and maybe over-donating a little bit to the true cost of printing flyers, and covering the cost of wine and cheese for when the author gets there. Rather than doing this out of the goodness of their hearts, however, publishers do it because independent bookstores are good for them to have around, as they’re the only booksellers who are too small and diffuse to make publishers do things.

3)    A Further Reorientation to Niche Specialization at Independents

Here we get to artisanal organizations, and the independent bookstores that are sticking around (or even more importantly, opening) have mostly given up aspirations of being generalists. In Toronto, we’ve got an independent bookstore which specializes in aviation, another for medieval history, and a third which has found a niche for discount-priced theology.* They’re like the Cascade sour beers to Barnes & Noble’s pilsners. While it’s definitely a trend, it’s not one I’d trace back just to 2010, as instead, the artisanal organization market position is one that independent bookstores have been relying on at least back into the 1980s.

In addition to just being niche, while independent hardware stores and grocers were going the way of the dodo, independent bookstores were also able to both capture and foment the formation of the “buy independent” social movements of the 1990s. It’s not many retail outlets that can successfully advocate for their mere existence as a public good. For instance, when was the last time that the New York Times unironically quoted somebody referring to the closing of an independent laundromat halfway across the country as a civic tragedy? As generalist independent bookstores have come to terms with their inability to compete on breadth with Barnes & Noble and Amazon, we see not only a transition to niche sellers, but also more sellers overall, as each one tends to take up a smaller footprint and have lower overhead costs than the independents of the past.

***

Of course, while there has been a rise in the number of independent bookstores in the 2010s, we shouldn’t overstate it, or be certain that it will continue. At the end of the day –and nobody likes to admit this –we’re talking about a segment that makes up less than 10% of industry sales and is still way down from its peak. It took one of the two major brick-and-mortar chains going out of business for this return to happen, but if Barnes & Noble goes under, it will upend any balance left between Amazon and everyone else. Yet unlike the industries for music and journalism, a preference for analog books among a major segment of the market doesn’t seem to be going away. Maybe if Barnes goes under we’ll instead be graphing the rise of brick-and-mortar bookstores by Amazon, and romantically pine for the good old days of Barnes as the industry villain.

 *If you’re a cynic, or even just a careful optimist, you’re also going to want to factor in the 80 stores Barnes & Noble has closed since 2010. So, since 2010 that’s a loss of 766 big brick-and-mortar bookstores which were selling a lot of books, and a gain of 655 generally much smaller brick-and-mortar bookstores which are generally selling many fewer books. Yet the number of physical books sold hasn’t really declined, and has actually increased for three years running (for reasons that are the subject of another post). In any case, the difference has been made up by Amazon.

**H/T to Christina Hutchinson and Chanmin Park, two undergraduate students in my Culture, Creativity, and Cities course, for these examples. You can see some of their work on bookstores, as well as other students’ great (and in progress!) work from this semester on Toronto martial arts studios, Korean and Indian restaurants, religious centers, food festivals, and so on here.

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Written by fabiorojas

March 30, 2017 at 12:21 am

global resistance in the neoliberal university

intlconf
Those of you who are interested in fending off growing neoliberalism in the university might be interested in the following international  line-up at CUNY’s union, PSC.
You can watch a livestream of the conference via fb starting tonight, Fri., March 3, 6-9pm and Sat., March 4, 9:30am-6pm EST:
…an international conference on Global Resistance in the Neoliberal University organized by the union will be held today and tomorrow, 3/3rd-4th at the PSC, 61 Broadway.  
 
Scholars, activists and students from Mexico, South Africa, Turkey, Greece, India and the US will lead discussions on perspectives, strategies and tactics of resisting the neoliberal offensive in general, and in the context of the university in particular.
 
You can visit this site for a link to the conference program:
 
Due to space constraints, conference registration is now closed. But we’re thrilled by the tremendous interest in the event! You can watch a livestream of the conference here: https://www.facebook.com/PSC.CUNY.  If you follow us on our Facebook page, you will receive a notification reminding you to watch.  
 
We look forward to seeing some of you tonight and to discussing the conference with many of you in the near future. 
 

 

 

Written by katherinechen

March 3, 2017 at 11:29 pm

the antitrust equilibrium and three pathways to policy change

Antitrust is one of the classic topics in economic sociology. Fligstein’s The Transformation of Corporate Control and Dobbin’s Forging Industrial Policy both dealt with how the rules that govern economic life are created. But with some exceptions, it hasn’t received a lot of attention in the last decade in econ soc.

In fact, antitrust hasn’t been on the public radar that much at all. After the Microsoft case was settled in 2001, antitrust policy just hasn’t thrown up a lot of issues that have gotten wide public attention, beyond maybe griping about airline mergers.

But in the last year or so, it seems like popular interest in antitrust is starting to bubble up again.

Just in the last few months, there have been several widely circulated pieces on antitrust policy. Washington Monthly, the Atlantic, ProPublica (twice), the American Prospect—all these have criticized existing antitrust policy and argued for strengthening it.

This is timely for me, because I’ve also been studying antitrust. As a policy domain that is both heavily technocratic and heavily influenced by economists, it’s a great place to think about the role of economics in public policy.

Yesterday I put a draft paper up on SocArXiv on the changing role of economics in antitrust policy. The 1970s saw a big reversal in antitrust, when we went from a regime that was highly skeptical of mergers and all sorts of restraints on trade to one that saw them as generally efficiency-promoting and beneficial for consumers. At the same time, the influence of economics in antitrust policy increased dramatically.

But while these two development are definitely related—there was a close affinity between the Chicago School and the relaxed antitrust policy of the Reagan administration, for example—there’s no simple relationship here: economists’ influence began to increase at a time when they were more favorable to antitrust intervention, and after the 1980s most economists rejected the strongest Chicago arguments.

I might write about the sociology part of the paper later, but in this post I just want to touch on the question of what this history implies about the present moment and the possibility of change in antitrust policy.

Read the rest of this entry »

Written by epopp

January 9, 2017 at 6:51 pm

cfp: “Seeking a More Just and Egalitarian Economy: Realizing the Future via Co-operatives, Communes, and Other Collectives” at SASE in Lyon, France – abstracts due Feb. 17, 2017 (updated)

Joyce Rothschild and I are co-organizing a mini-conference at the Society for the Advancement of Socio-Economics (SASE) in Lyon, France.  Please consider submitting an abstract, due to the SASE submission site by Feb. 17, 2017 (updated deadline!).  Accepted presenters will need to provide a full paper by June 1, 2017 for discussion.  Please circulate to this cfp to interested persons!

Seeking a More Just and Egalitarian Economy: Realizing the Future via Co-operatives, Communes, and Other Collectives

Forty years ago, as the most recent wave of economic collectives and cooperatives emerged, they advocated a model of egalitarian organization so contrary to bureaucracy that they were widely called “alternative institutions” (Rothschild 1979). Today, the practices of cooperative organizations appear in many movement organizations, non-governmental organizations (NGOs), and even “sharing” firms. Cooperative practices are more relevant than ever, especially as recent political changes in the US and Europe threaten to crush rather than cultivate economic opportunities.

Cooperative groups engage in more “just” economic relations, defined as relations that are more equal, communalistic, or mutually supportive.  The oldest collectives – utopian communes, worker co-operatives, free schools, and feminist groups – sought authentic relations otherwise suppressed in a hierarchical, capitalist system.  Similar practices shape newer forms: co-housing, communities and companies promoting the “sharing economy,” giving circles, self-help groups, and artistic and social movement groups including Burning Man and OCCUPY. While some cooperatives enact transformative values such as ethically responsible consumerism and collective ownership, other groups’ practices reproduce an increasingly stratified society marked by precarity. Submitted papers might analyze the reasons for such differences, or they might examine conditions that encourage the development of more egalitarian forms of organization.

Submitted papers could also cover, but are not limited, to exploring:

  • What is the nature of “relational work” (cf. Zelizer 2012) conducted in these groups, and how it differs – or is similar to – from relational work undertaken in conventional capitalist systems?
  • How do collectivities that engage in alternative economic relations confront challenges that threaten – or buttress – their existence? These challenges include recruiting and retaining members, making decisions, and managing relations with the state and other organizations. Moreover, how do these groups construct distinct identities and practices, beyond defining what they are not?
  • How are various firms attempting to incorporate alternative values without fully applying them? For instance, how are companies that claim to advance the sharing economy – Uber, airbnb, and the like – borrowing the ideology and practices of alternative economic relations for profit rather than authentic empowerment? What are the implications of this co-optation for people, organizations, and society at large?
  • How do new organizations, especially high tech firms, address or elide inequality issues? How do organizing practices and values affect recognition and action on such issues?
  • What can we learn from 19th century historical examples of communes and cooperatives that can shed insight on their keys to successful operation today? Similarly, how might new cooperatives emerge as egalitarian and collective responses to on-going immigration issues or economic crisis generated by policies favoring the already wealthy?
  • Are collectives, cooperatives and/or firms that require creativity, such as artists’ cooperatives or high tech firms, most effective when they are organized along more egalitarian principles? How do aspects of these new modes of economic organization make them more supportive of individual and group creativity?

 

Bibliography

Graeber, David.   2009. Direct Action: An Ethnography.   Oakland, CA: AK Press.

Rothschild, Joyce. 1979. “The Collectivist Organization: An Alternative to Rational-Bureaucratic Models.” American Sociological Review 44(4): 509-527.

Rothschild, Joyce and J. Allen Whitt. 1986. The Cooperative Workplace: Potentials and Dilemmas of Organizational Democracy and Participation. New York: Cambridge University Press.

Zelizer, Vivianna A. 2012. “How I Became a Relational Economic Sociologist and What Does That Mean?” Politics & Society 40(2): 145-174.

Questions about the above cfp may be directed to Joyce and myself.

Here is info about the mini-conference format:

Each mini-conference will consist of 3 to 6 panels, which will be featured as a separate stream in the program. Each panel will have a discussant, meaning that selected participants must submit a completed paper in advance, by 1 June 2017. Submissions for panels will be open to all scholars on the basis of an extended abstract. If a paper proposal cannot be accommodated within a mini-conference, organizers will forward it to the most appropriate research network as a regular submission.

More info about mini-conferences here.

The 2017 SASE conference in Lyon, France, hosted by the University of Lyon I from 29 June to 1 July 2017, will welcome contributions that explore new forms of economy, their particularities, their impact, their potential development, and their regulation.

More info about the SASE conference theme, a critical perspective on the sharing economy, is available at “What’s Next? Disruptive/Collaborative Economy or Business as Usual?

Joyce and I look forward to reading your submissions!

Written by katherinechen

December 13, 2016 at 9:16 pm

state of the field article on field theory in non-profit organizations, by Emily Barman, now available

We’re at the halfway mark in July.  Looking for summer reading that covers the latest sociological theories in non-profit research?  Emily Barman has a “state of the field” article on the use of field theory in the non-profit organizations literature in the Organizations and Work section of Sociology Compass.

Here’s the abstract for her article “Varieties of Field Theory and the Sociology of the Non-profit Sector:”

Abstract

This paper reviews the use of field theory in the sociological study of the non-profit sector. The review first shows how field theory, as a conceptual framework to explain social action, provides a valuable sociological counterweight to prevailing economic and psychological orientations in the interdisciplinary scholarship on the non-profit sector. However, despite its certain shared assumptions, field theory in sociology encompasses three distinct, albeit interrelated, approaches: the Bourdieusian, New Institutionalist, and Strategic Action Fields perspectives. I comparatively outline the key analytical assumptions and causal claims of each version of field theory, whether and how it recognizes the specificity of the non-profit sector and then delineate its application by sociologists to the non-profit sector. I show how scholars’ employment of each articulation of field theory to study non-profit activity has been influenced by pre-existing scholarly assumptions and normative claims about this third space. The article concludes by summarizing the use of these varieties of field theory in the sociology of the non-profit sector and by identifying future directions in this line of research.

Also, Emily has a new book available, titled Caring Capitalism: The Meaning and Measure of Social Value (2016, Cambridge University Press)!  Check out the book blurb here.

Written by katherinechen

July 11, 2016 at 4:49 pm

genres in popular music

There is a new paper in PLoS One by Daniel Silver, Monica Lee, and C. Clayton Childress about the structure of genres. They use MySpace co-mentioning data to understand which genres are mentioned together, which maps out the space of pop music in the mid-2000s. From the abstract of “Genre Complexes in Popular Music:”

Recent work in the sociology of music suggests a declining importance of genre categories. Yet other work in this research stream and in the sociology of classification argues for the continued prevalence of genres as a meaningful tool through which creators, critics and consumers focus their attention in the topology of available works. Building from work in the study of categories and categorization we examine how boundary strength and internal differentiation structure the genre pairings of some 3 million musicians and groups. Using a range of network-based and statistical techniques, we uncover three musical “complexes,” which are collectively constituted by 16 smaller genre communities. Our analysis shows that the musical universe is not monolithically organized but rather composed of multiple worlds that are differently structured—i.e., uncentered, single-centered, and multi-centered.

For Chicago-ites, this is a “hollow core” finding about musical social worlds. Recommended.

50+ chapters of grad skool advice goodness: Grad Skool Rulz ($2!!!!)/From Black Power/Party in the Street

Written by fabiorojas

June 7, 2016 at 12:01 am

stratification in the sharing economy: how oreo truffles snuff out egalitarianism

Several writing group colleagues and I were discussing one participant’s extended conference abstract about “prefigurative” groups that have an impact upon society.  The author contended that for a variety of reasons – in particular, pressures exerted by the state, most groups are unable to exact larger change.   Another colleague suggested looking at studies of the sharing economy, which some might see as a contemporary version of the 1960s-1970s collectivist-democratic organizations.

Yesterday, I stumbled upon one study of the sharing economy published in Poetics.   This comparative study examines 4 different cases of groups with egalitarian missions.

“Paradoxes of openness and distinction in the sharing economy”

Abstract

This paper studies four sites from the sharing economy to analyze how class and other forms of inequality operate within this type of economic arrangement. On the basis of interviews and participant observation at a time bank, a food swap, a makerspace and an open-access education site we find considerable evidence of distinguishing practices and the deployment of cultural capital, as understood by Bourdieusian theory. We augment Bourdieu with concepts from relational economic sociology, particularly Zelizer’s “circuits of commerce” and “good matches,” to show how inequality is reproduced within micro-level interactions. We find that the prevalence of distinguishing practices can undermine the relations of exchange and create difficulty completing trades. This results in an inconsistency, which we call the “paradox of openness and distinction,” between actual practice and the sharing economy’s widely articulated goals of openness and equity.

The authors show how class-based stratification can inhibit heterogeneous membership and exchanges, especially when members refuse to make exchanges with persons of lower class. In the time bank, some participants donated their time without drawing back time.  They also preferred to  volunteer skills that they didn’t use in the workplace, declining to offer desired legal and programming expertise.

The food swapping collective, which arose out of the founders’ desire to decrease food waste among single professionals, is particularly fascinating for its participants’ designation of acceptable vs. unacceptable homemade offerings:

The policing of the circuit’s boundaries was particularly clear at one December swap, a charity cookie exchange that drew more than 90 participants—nearly all of them first timers. One regular pointed out that someone had made Betty Crocker cookies and admitted it on their information sheet. ‘‘I know it’s for charity,’’ one swapper remarked, ‘‘but they clearly don’t understand what a swap means for us.’’ One week, a regular participant, noticing Oreo truffles on offer asked, ‘‘Now, are the truffles actually made of Oreo cookies?’’ ‘‘Yeah,’’ the new would-be swapper enthusiastically answered, pleased with his re-articulation of a store-bought product into an innovative form. ‘‘Oh, well then I won’t be able to trade with you, because I can only trade for, like, really homemade things. Like made from scratch, with no preservatives or chemicals or anything, because my friend doesn’t eat any processed foods. She only eats homemade things, that she makes completely herself.’’ These examples show the ways specific evaluative criteria are mobilized to circumscribe the extent to which new participants can enter the circuits of exchange within the swap.

Oreotruffles

One sharing economy’s bane: Oreo truffles.  Photo credit: Kraft.

One regular participant said that she would trade with first timers who did not understand what counted as homemade. However, she would always give them tips after trading with them. If they came back and still did not get it, she would not trade with them again and was not afraid to reject face-to-face offers. Often, new participants who lacked the cultural capital to navigate the food swap environment would leave having made only one trade or a few trades, going home with the vast majority of the food they brought. Such negotiations maintained the values of the swap by drawing on seemingly contradictory notions of ‘‘homemade’’ and ‘‘using up leftovers’’ to delimit participation within the swapping circuit…..

In the food swap, failed matches were rampant. Participants policed choice of ingredients, packaging, volume of offerings, what swappers made, and how they dressed. To make a good match, participants had to intuit multiple criteria which were
highly opaque, often arbitrary, and shifting. We found a fine line between leftovers that were transformed into something exotic, versus food that was just ‘‘left over.’’ Another matching failure occurred when people re-used ordinary jars rather than
the currently faddish, branded canning jars that served as instruments of symbolic class decontamination. The most successful matches happened among purveyors of authentic homemade foods that exhibited no class contamination. In this site, charity
trades also occurred: people would give their foods to others and take nothing in return, or take foods that they then did not use. On one occasion, a swapper was observed giving items she had accumulated to a homeless person as she left the swap.

Such research suggests that such sharing economies may be doomed to one-time, never-to-be-repeated exchanges when participants fixated on the parity (or potential status-enhancement) of possible exchanges.   While other participants attempted to form community by making exchanges as a matter of practice or as a means of socializing newcomers, it seems these exchanges are not enough to sustain these collectives.

Written by katherinechen

February 18, 2016 at 10:06 pm

how the acid rain program killed northeasterners

Remember acid rain? For me, it’s one of those vague menaces of childhood, slightly scarier than the gypsy moths that were eating their way across western Pennsylvania but not as bad as the nuclear bombs I expected to fall from the sky at any moment. The 1980s were a great time to be a kid.

The gypsy moths are under control now, and I don’t think my own kids have ever given two thoughts to the possibility of imminent nuclear holocaust. And you don’t hear much about acid rain these days, either.

In the case of acid rain, that’s because we actually fixed it. That’s right, a complex and challenging environmental problem that we got together and came up with a way to solve. And the Acid Rain Program, passed as part of the Clean Air Act Amendments of 1990, has long been the shining example of how to use emissions trading to successfully and efficiently reduce pollution, and served as an international model for how such programs might be structured.

The idea behind emissions trading is that some regulatory body decides the total emissions level that is acceptable, finds a way to allocate polluters rights to emit some fraction of that total acceptable level, and then allows them to trade those rights with one another. Polluters for whom it is costly to reduce emissions will buy permits from those who can reduce emissions more cheaply. This meets the required emissions level more efficiently than if everyone were simply required to cut emissions to some specified level.

While there have clearly been highly successful examples of such cap-and-trade systems, they have also had their critics. Some of these focus on political viability. The European Emissions Trading System, meant to limit CO2 emissions, issued too many permits—always politically tempting—which has made the system fairly worthless for forcing reductions in emissions.

Others emphasize distributional effects. The whole point of trading is to reduce emissions in places where it is cheap to do so rather than in those where it’s more expensive. But given similar technological costs, a firm may prefer to clean up pollutants in a well-off area with significant political voice rather than a poor, disenfranchised minority neighborhood. Geography has the potential to make the efficient solution particularly inequitable.

These distributional critiques frequently come from outside economics, particularly (though not only) from the environmental justice movement. But in the case of the Acid Rain program, until now no one has shown strong distributional effects. This study found that SO2 was not being concentrated in poor or minority neighborhoods, and this one (h/t Neal Caren) actually found less emissions in Black and Hispanic neighborhoods, though more in poorly educated ones.

A recent NBER paper, however, challenges the distributional neutrality of the Acid Raid Program (h/t Dan Hirschman)—but here, it is residents of the Northeast who bear the brunt, rather than poor or minority neighborhoods. It is cheaper, it turns out, to reduce SO2 emissions in the sparsely populated western United States than the densely populated east. So, as intended, more reductions were made in the West, and less in the East.

acid_revised

The problem is that the population is a lot denser in the Northeastern U.S. So while national emissions decreased, more people were exposed to relatively high levels of ­SO2 and therefore more people died prematurely than would have been the case with the inefficient solution of just mandating an equivalent across-the-board reduction in SO2 levels.

To state it more sharply, while the trading built into the Acid Rain Program saved money, it also killed people, because improvements were mostly made in low-population areas.

This is fairly disappointing news. It also points to what I see as the biggest issue in the cap-and-trade vs. pollution tax debate—that so much depends on precisely how such markets are structured, and if you don’t get the details exactly right (and really, when are the details ever exactly right?), you may either fail to solve the problem you intended to, or create a new one worse than the one you fixed.

Of course pollution taxes are not exempt from political difficulties or unintended consequences either. And as Carl Gershenson pointed out on Twitter, a global, not local, pollutant like CO2 wouldn’t have quite the same set of issues as SO2. And the need to reduce carbon emissions is so serious that honestly I’d get behind any politically viable effort to cut them. But this does seem like one more thumb on the “carbon tax, not cap-and-trade” side of the scale.

 

Written by epopp

February 15, 2016 at 1:17 pm

Call for papers: Social movements and the economy

This is not an April Fool’s joke.

Call for Papers: Social Movements and the Economy
Northwestern University, Kellogg School of Management
Date: October 23-25, 2015

We invite submissions for a workshop on the intersection of social movements and the economy, to be held at Northwestern University’s Kellogg School of Management from Friday October 23 to Sunday October 25, 2015.

In recent years, we have seen the rise of a vibrant literature engaging with questions of how social movements challenge firms, support the rise of new industries, and engender field change in a variety of domains of economic activity. A growing amount of attention has also been devoted to the ways that actors with vested interests in particular types of economic activity may resist, co-opt, imitate, or partner with activist groups challenging their practices. On the whole, there is now substantial evidence of a variety of ways that social movements effectively influence the economy.

And yet there has been less recent attention paid to the inverse relationship: classic questions related to how economic forces – and the broader dynamics of capitalism – shape social movements. This is all the more remarkable given the major economic shifts that have taken place in the U.S. and abroad over the past decade, including economic crises, disruptions associated with financialization and changing corporate supply chains, the struggles of organized labor, and transformations linked to new technologies. These changes have major implications for both the theory and practice of social movement funding, claims-making, strategic decision-making, and the very targeting of states, firms, and other institutions for change.

This workshop seeks to bring together these two questions in order to engage in a thorough reconsideration of both the economic sources and the economic outcomes of social movements, with careful attention to how states intermediate each of these processes.

The keynote speaker will be John McCarthy, Distinguished Professor of Sociology at Pennsylvania State University.

The workshop is planned to start with a dinner in the evening on Friday 10/23, to conclude with morning sessions on Sunday 10/25. Invited guests will be provided with domestic travel and accommodation support.
Submissions (PDF or DOC) should include:
– A cover sheet with title, name and affiliation, and email addresses for all authors
– An abstract of 200-300 words that describes the motivation, research questions, methods, and connection to the workshop theme
– Include the attachment in an email with the subject “Social Movements and the Economy”

Please send abstracts to walker@soc.ucla.edu and b-king@kellogg.northwestern.edu by May 15, 2015. Notification of acceptance will occur on or around June 15.

Contact Brayden King (b-king@kellogg.northwestern.edu) or Edward Walker (walker@soc.ucla.edu) for more information.

Written by brayden king

April 1, 2015 at 9:14 pm

what higher ed might share with the ferguson p.d.

This has been hanging in my mind ever since the Department of Justice report on the Ferguson police department came out a couple of weeks ago. I’ve been loathe to write about it for fear of trivializing the events in Ferguson. Also, it seems somewhat obvious. But I think it’s important to highlight how the problem the Ferguson PD is facing is not a problem unique to the criminal justice system, but that it shares with other social institutions. Since I haven’t seen it discussed elsewhere — though feel free to comment if you have — here goes.

In its damning indictment of the Ferguson PD — an indictment that has already cost the police chief and the city manager their jobs — DOJ points to the city’s focus on generating revenue as causing many of its problems. In combination with systemic racism, which the DOJ report also documents, the city of Ferguson has come to see its residents — especially its African-American residents — as cash machines rather than citizens it is meant to serve and protect. In the words of the report,

The City’s emphasis on revenue generation has a profound effect on FPD’s approach to law enforcement….Officer evaluations and promotions depend to an inordinate degree on ‘productivity,’ meaning the number of citations issued. Partly as a consequence of City and FPD priorities, many officers appear to see some residents, especially those who live in Ferguson’s predominantly African-American neighborhoods, less as constituents to be protected than as potential offenders and sources of revenue.

Sometimes I worry that something analogous is in the future of higher ed. Not just that budget cuts will starve it into a shadow of its former self, or that it is coming to serve more as a mechanism of social exclusion than mobility. (Though I worry about those things too.)

My biggest fear is that a similar focus on revenue generation — on seeing students not as people to be educated but as income streams — will essentially corrupt the institution. And it will do so in ways that are most harmful to the least advantaged.

Read the rest of this entry »

Written by epopp

March 23, 2015 at 12:16 pm

meet the spockers

spock

In honor of Leonard Nimoy, Canadians have been drawing his likeness on their five dollar bill. The Bank of Canada says “cut it out.”

50+ chapters of grad skool advice goodness: Grad Skool Rulz ($2!!!!)/From Black Power/Party in the Street!!  

Written by fabiorojas

March 6, 2015 at 12:24 am

how the financial crisis and obamacare improved student loans

Student debt is in the news a lot these days. It currently stands at $1.2 trillion in the U.S., having surpassed credit card debt in 2010. The Occupy movement pushed the issue onto the front pages with its call for debt forgiveness, and since then loans have bounced in and out of the news under headlines like “crisis” and “crippling.”

student loans

Of course, there’s always two ways of looking at things. Since the college wage premium (or, more accurately, the noncollege penalty) has increased, plenty of folks have argued that college, loans and all, is still a great deal despite rising tuition, and that many students should actually be borrowing more.

That’s hard to tell an underemployed 24-year-old, but never mind. In general, our shift toward loan-driven higher ed financing is a big problem. But there’s one important, and often overlooked, way in which things have gotten better. Much better.

Read the rest of this entry »

Written by epopp

January 5, 2015 at 2:23 pm

Posted in education, finance, markets

ka-ching kitty!

Psych experiments show that we tend to overvalue objects that we possess – according to a coffee mug experiment, we would be willing to sell one that we have at a certain price, but others would not be willing to pay that same price.   What happens when the object is a non-human family member?

When negotiating the sale of their home, one Australian family was willing to give up their cat Tiffany to the new homeowners for $140,000 (about $120K in US dollars). Some readers of the article announcing this exchange felt their pets were priceless, while others pointed out that cats are territorial and may not tolerate moves.

The real estate agent is especially happy about his commission, presumably

The real estate agent is especially happy about his commission, presumably

Don’t expect some cats to reciprocate your affectionate feelings – according to one medical examiner, cats will consume your lips and other edibles should you expire in your home. Sweet dreams, kitty owners.

Written by katherinechen

October 22, 2014 at 2:57 pm

funk and hirschman on derivatives

All around super nice guys and scholars Russell Funk and Dan Hirschman have a new paper in ASQ on financial regulations. The basic idea is that new securities can slowly unravel regulatory schemes:

Regulators, much like market actors, rely on categorical distinctions. Innovations that are ambiguous to regulatory categories but not to market actors present a problem for regulators and an opportunity for innovative firms. Using a wide range of primary and secondary, qualitative and quantitative sources, we trace the history of one class of innovative financial derivatives—interest rate and foreign exchange swaps—to show how these instruments undermined the separation of commercial and investment banking established by the Glass–Steagall Act of 1933 even as overt political action failed to do so. Swaps did not fit neatly into existing product categories—futures, securities, loans—and thus evaded regulatory scrutiny for many years. The market success of swaps put commercial and investment banks into direct competition and, in so doing, undermined Glass–Steagall. Drawing on this case, we theorize that ambiguous innovations may disrupt the regulatory status quo and shift the political burden onto parties that want to maintain existing regulations. Our findings also suggest that category-spanning innovations may be more valuable to market participants if regulators find them difficult to interpret.

Read the whole paper here.

50+ chapters of grad skool advice goodness: Grad Skool Rulz/From Black Power 

Written by fabiorojas

October 13, 2014 at 4:16 am

Posted in economics, fabio, markets

money, money, money … at Yale

Yale is hosting a conference on $$$, which is open to the public, next Fri., Sept. 12th at Yale.

The line-up is both impressive and exciting, not least of all because it involves our orgtheory crew plus beloved colleagues and dear orgtheory readers!

Friday, September 12, 2014
Hosted by:
Nina Bandelj ~ Sociology, University of California at Irvine
Daniel Markovits ~ Yale Law School
Frederick F. Wherry ~ Sociology, Yale University

With papers from:
Bruce Carruthers ~ Sociology, Northwestern University
Christine Desan ~ Harvard Law School
Nigel Dodd ~ Sociology, London School of Economics
Akinobu Kuroda ~ Institute for Advanced Studies on Asia, Tokyo
Simone Polillo ~ Sociology, University of Virginia
Akos Rona-Tas ~ Sociology, University of California at San Diego
Alya Guseva ~ Sociology, Boston University
Rene Almeling ~ Sociology, Yale University
David Grewal ~ Yale Law School
Kieran Healy ~ Sociology, Duke University
Marion Fourcade ~ Sociology, University of California at Berkeley
Supriya Singh ~ Sociology, RMIT, Australia
Stephen Vaisey ~ Sociology, Duke University
Shane Frederick ~ Psychology, Yale School of Management
Daniel Markovits ~ Yale Law School

SPECIAL SESSION:
The Social Meaning of Money
Turns 20
Nancy Folbre ~ Economics, University of Massachusetts
Arlie Hochschild ~ Sociology, University of California at Berkeley
Eric Helleiner ~ Political Science, University of Waterloo
Bill Maurer ~ Anthropology, University of California at Irvine
Jonathan Morduch ~ Economics, New York University

Co-Sponsored by The Office of the Provost, Yale University ~ Yale Center for Cultural Sociology
Center for Organizational Research at the University of California, Irvine
Yale Center for Comparative Research ~ Yale Law School ~ Yale School of Management

Here’s the program:

Money Talks: A Symposium at Yale
Friday, September 12, 2014

Venues:
Morning Sessions:Yale School of Management, Evans Hall, 165 Whitney Avenue. Class of 1980 Classroom, 2400
Afternoon sessions: Yale Law School, 127 Wall Street, Room 127 (TBC).

9:00 ~ 9:15 AM Welcome
Richard Breen ~ Yale University, Chair of the Department of Sociology
Daniel Markovits ~ Yale Law School, Symposium Co-host
Frederick Wherry ~ Yale University, Symposium Co-organizer
Nina Bandelj ~ University of California, Irvine, Symposium Co-organizer
9:15 ~ 10:45 AM Panel 1: Money and Markets
Bruce Carruthers ~ Northwestern University
Some A-B-C’s of Financial Fables: Rethinking Finance and Money
Akinobu Kuroda ~ Institute for Advanced Studies on Asia, University of Tokyo
The Characters of Money: A Historical Viewpoint from Complementary Currencies
Simone Polillo ~ University of Virginia
A Macro-Sociology of Money
Alya Guseva ~ Boston University & Akos Rona-Tas ~ University of California, San Diego
Money Talks, Plastic Money Tattles
Moderator: Alice Goffman ~ University of Wisconsin, Madison
10:45 ~ 11:00 AM Coffee Break
11:00 AM ~ 12:30 PM Panel 2: Money and Morals
Rene Almeling ~ Yale University
Money, Technology, and Bodily Experience: Comparing the Production of Eggs for Pregnancy or for Profit
David Grewal ~ Yale Law School
The Meaning of the Mirage: Money and Sin in Early Political Economy
Marion Fourcade ~ University of California, Berkeley & Kieran Healy ~ Duke University
Seeing Like a Market
Supriya Singh ~ RMIT University, Australia
Money and Morals: The Biography of Transnational Money
Moderator: Olav Sorenson ~ Yale School of Management
12:30 ~ 2:00 PM Lunch Break
2:00 ~ 4:00 PM Panel 3: The Social Meaning of Money, 20 Years Later
Nancy Folbre ~ University of Massachusetts, Amherst
Accounting for Care
Arlie Hochschild ~ University of California, Berkeley
Going on Attachment Alert: Paying Money, Managing Feeling
Eric Helleiner ~ University of Waterloo, Canada
The Macro Social Meaning of Money: From Territorial Currencies to Global Money
Bill Maurer ~ University of California, Irvine
Zelizer for the Bitcoin Moment: The Social Meaning of Payment Technology
Jonathan Morduch ~ New York University
Economics, Psychology, and the Social Meaning of Money
Moderator: Nina Bandelj ~ University of California, Irvine
4:00 ~ 4:15 PM Coffee Break
4:15 ~ 6:00 PM Panel 4: The Moralities, Solidarities, and Meanings of Money
Stephen Vaisey ~ Duke University
What Would You Do For a Million Dollars?
Shane Frederick ~ Yale School of Management
Positional Concerns
Christine Desan ~ Harvard Law School
Money as a Constitutional Practice
Daniel Markovits ~ Yale Law School
Economic Inequality and the Meaning of Money
Nigel Dodd ~ London School of Economics
Is Bitcoin Utopian?
Moderator: Frederick Wherry ~ Yale University
6:00 PM A Conversation With Viviana Zelizer
Moderators: Nina Bandelj ~ University of California, Irvine & Frederick Wherry ~ Yale University
6:30 PM Reception ~ Yale Law School, The Alumni Reading Room

Written by katherinechen

September 5, 2014 at 2:47 pm

creative reconstruction

One of the most famous passages in economic thought is Schumpeter’s description of markets as an arena for “creative destruction.” This conjures images of the rust belt with its abandoned factories and warehouses. In the Internet age, I think the story is a bit different. Sure, we have Pets.com and other collateral damage of innovation, but it seems that the Internet allows some firms and brands a bit more flexibility. You have creative reconstruction.

For example, people laugh at MySpace and Friendster for losing their early advantage in social networking to Facebook. It sounds as if these firms became the 21st century equivalent of horse and buggy firms (which is also a myth – these firms didn’t just go bankrupt but slowly morphed and merged with auto makers). But if you actually look, you see that MySpace is attracting a million visitors per month and ranks in the top 500 web sites in the United States. Similarly, Friendster is now a gaming web site with a few million users, mainly from Asia.

Make no mistake, these firms will likely never regain their position of dominance. They are quite close to failure (see here for recent MySpace pessimism). But they still seem to have quite a bit of value, nearly a decade after their collapse. If I told you about a company with a few million visitors, but didn’t tell you the origin, you’d probably be impressed. The lesson I take is that the market can allow opportunities for reconstruction.

50+ chapters of grad skool advice goodness: Grad Skool Rulz/From Black Power 

Written by fabiorojas

August 7, 2014 at 12:01 am

Posted in fabio, markets

nooks and experiences

It was recently announced that Barnes and Noble would spin off the Nook. Despite valiant attempts at penetrating the tablet market, they couldn’t do it. What is less remarked is that Barnes and Noble is actually profitable. Only the digital reader is a money loser. The question is, then, how is a brick and mortar outfit still alive in the age of Amazon and digital books?

My answer: experience. I, too, thought that B&N was done for.  But what I realize is that brick and mortar, in some cases, is an experience. A pleasant place to do things, even if it can be done cheaper online. Think restaurant. B&N, and the now rebounding independent book store sector, are providing reading experiences that people value. When I go to a B&N, I see things for kids, music, and a cafe. And it’s probably the most literary place in most suburbs. So, B&N, you shall live to see another day.

50+ chapters of grad skool advice goodness: Grad Skool Rulz/From Black Power

Written by fabiorojas

July 10, 2014 at 12:01 am

Posted in fabio, markets

the psychology of ivy league grads on wall street

Ezra Klein interviews Kevin Roose, who has a new book about young Ivy League graduates who work on Wall Street. The take home point is simple: people who graduate from competitive schools graduate toward these jobs not because they love business, but because they want security. Wall Street jobs are high paid, require little experience, and have a bit of prestige. On the origins of the short term Wall Street job:

Wall Street invented this new way of recruiting in the early 80s. Before that they hired like any other industry. If you wanted to be a banker you applied for a job at a bank and they hired you or they didn’t. But in the early 80s Goldman Sachs and others figured out they could broaden their net and get lots of really smart people if they made it a temporary position rather than a permanent one.

So they created the two-and-out program. The idea is you’re there for two years and then you move onto something else. That let them attract not just hardcore econ majors but people majoring in other subjects who had a passing interest in finance and didn’t know what else to do. People now think going to a bank for two years will help prepare them for the next thing and keep them from having to make these hard decisions about the rest of their life. It made it like an extension of college. And it was genius. It led to this huge explosion in recruitment and something like a third of Ivy League graduates going to Wall Street.

Of course, it’s a mixed bag for the grads:

EK: So after writing this book, what would you say to a college senior thinking of going to Wall Street?

KR: First I would ask them why they wanted to work in an investment bank. If the answer is “because I’m tremendously in debt and need to pay it out” or “I’ve been reading Barron’s since I was 12 years old and I desperately want to be an investment banker” then those are legitimate reasons. Go ahead. But if it’s just about taking risk off the table and doing the safe prestigious thing, I’d tell them first that it will make them truly miserable, the kind of miserable it could take years to recover from, and that it also no longer has that imprimatur. It can actually hinder you. I’ve spoken to tech recruiters who say they only hire bankers in their first year or two because after that banking ruins them.

EK: How does it ruin them?

KR: It makes them too risk conscious. It gets them used to a standard of lifestyle they may not be able to replicate in any other industry. And it has a deleterious effect on creativity. Of the eight people I followed, a few came out very damaged by the experience. And not in a way a vacation can cure. It’s not about having bags under your eyes. It destroys your ability to think in creative ways about what it means to build something of value. The people I followed would admit they got a lot out of being a banker but I don’t think they’re all that tuned into the ways the experience changed them.

Check it out.

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Written by fabiorojas

May 22, 2014 at 12:01 am

a broken patent system? the case of samsung vs. apple

Vanity Fair has a new article on the Samsung-Apple litigation. Kurt Eichenwald makes the following case about Samsung’s business strategy:

  • Pick a cool area of electronics.
  • Quickly reverse engineer lower quality, low cost versions of the innovators.
  • When sued for copyright or patent infringement, fight non-stop legal battles that only end with last-minute settlements.
  • You win by either (a) grabbing insurmountable market share during the legal battle or (b) punishing small firms with exhausting litigation and high legal fees (Samsung counter-sues almost all plaintiffs).

If this is an accurate account of Samsung’s strategy, it has interesting implications. First, it contradicts resource based value theory in that the firm doesn’t need a monopoly on anything – just the ability to quickly mimic and exploit the system. Second, it suggests that markets are indeed stable in the absence of patents or enforceable intellectual property rights. Samsung has beat up some other firms, but most competitors have survived. Third, it suggests an interesting use of slack resources – throw them at emerging markets. Fourth, it suggests that the patent system is simply an ineffective means of enforcing intellectual property rights when the defendant is sufficiently large.

Strategy scholars and intellectual property gurus – go nuts in the comments.

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Written by fabiorojas

May 8, 2014 at 12:06 am

book spotlight: from social movement to moral market by paul-brian mcinerney

I had the pleasure of reading Paul-Brian McInerney’s book, From Social Movement to Moral Market, as it was being written. It’s a good book that expands on the new sociology of markets, which focuses on how ideas of worth and value influence firms and exchange. The main contribution of McInerney’s book is explaining how one specific movement, the Circuit Riders, innovated the field of IT for non-profits. This is a big area of the  market and it raises a number of issues that are worth discussing.

At first, the Circuit Riders start off as a typical movement.  A small cluster of nerds who have the dream of helping non-profits exploit new information technologies. Later, things get interesting as Microsoft jumps into the fray and creates a hybrid organization that bridges the IT consulting world and the idealistic nerd world. This creates a sort of situation of moral ambivalence where people question the role of various organizations in helping non-profits. Thus, movements create new spaces that have to be negotiated as markets mature and become institutionalized.

The bigger picture is that McInerney’s book makes a strong case that movements are vital actors in society. Not only do they push for political change, but they are responsible for creating markets and organizations. I think research likes this makes the case that studies of social change should more consistently look for movement like actors across different social domains.

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Written by fabiorojas

May 7, 2014 at 12:01 am

orgtheory question of the day: why is blackberry not dead yet?

People keep predicting the death of BlackBerry. And it’s obvious they lost the mobile battle, though the recent phones do have fans and work well. Just too little, too late. So what’s the deal? Is it just the pile of cash? How are they alive after revenue dropped by $1  BILLION?

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Written by fabiorojas

March 14, 2014 at 12:01 am

why is the asa against public access?

Federal grant agencies have asked people who receive grants to make the results of their work “public access.” In other words, if the public pays for it, the public should get to read it. Turns out that the ASA is against this policy. In a letter dated January 9, 2012 (about two years ago), Sally Hillsman, executive officer of the ASA makes a strong argument against public access. Here is the letter and some key clips. Please read the letter yourself (open_access_hillsman):

It remains unclear why the federal government should spend scarce taxpayer dollars appropriated for scientific research to add to existing dissemination avenues. This is what scientific societies such as the ASA and our private sector publishing partners have done for over a century, and continue to do extremely well today. The national and international marketplace demonstrates that non-­‐profit and profit-­‐making scientific publishers in collaboration with scholarly societies have responded vigorously and competitively to expand access to scientific knowledge as new demands for content and sophisticated communication technologies have emerged. This success suggests that federal science agencies should invest taxpayer dollars in the research itself, especially as federal dollars that support scientific innovation fail to keep up with the pace of research.

And:

There are no empirical studies that I know of which support the notion that free access to the scientific research literature will increase research productivity or economic growth in the United States.

And:

ASA spends nearly $600,000 annually on journal editorial office expenses alone (which does not include administrative costs, printing and mailing expenses, editor honoraria, legal or overhead costs). ASA does not pay peer reviewers, but in return we sacrifice some revenue by a long-­‐standing policy of keeping our university library subscription prices low (averaging well under $300 in 2011) in explicit recognition of the contribution university faculty make as peer reviewers, editors, and editorial board members.

Comments: First, it seems that the main issue in Dr. Hillsman’s response is that they are concerned about the income stream. I think this is a legitimate concern. But it should lead to a few sensible questions. For example, in an age of electronic publishing, why does one need $600,000 for a journal office? At the AJS, of which I was an editor, we had (1) a full time manager (call it $50k), (2) some part time staff ($50k), (3) office space (say $5k month – $60k per year) and toss in $50k for postage, computers, etc. That totals about $210k per year. If we give Andy a nice fat bonus for running the joint ($50k), you get up to $260k. I am not sure why we need to wrack up hundreds of thousands more in administrative costs.

But there are deeper questions. What is preventing the ASR from going all electronic and printing paper versions on demand for a few readers? Or going free access, but having advertisements or the “freemium” model? In other words, this argument seems to be a rear guard defense of an older publishing model, not an attempt to creatively think about how the ASR can be read by the widest audience possible.

Second, I don’t think Dr. Hillsman’s letter gets at the main point – the Federal government, sensibly, doesn’t want the results of funded research to be hidden behind pay walls. The pay wall for ASR may not be a barrier to social scientists who have university accounts, but $300 is a barrier for many other readers. But the Federal government’s argument isn’t directed at the ASA. It’s directed at other publishers who charge thousands of dollars for a journal subscription. If you are a lay person, a poor person, or someone from another country, this is a real barrier.

We are now living in an exciting era of journal publishing. We have traditional models, the egalitarian PLoS One model, and the “up or out” Sociological Science model. I say let us experiment, not drift into rent seeking defenses of a 19th century approach to science.

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Written by fabiorojas

January 22, 2014 at 12:01 am

Posted in academia, fabio, markets, the man

post-curator art, part deux

At Conceptual Fine Arts, they raise the question of post-curator art, which means that the job of selecting art is decentralized and de-institutionalized:

 Therefore, what does it happen if the artworks, that once circulated mostly thanks to art magazines (supported by gallerists) and exhibition catalogues, are now instantly available online to everyone?

A preliminary answer to this difficult question would be that a lot of people will simultaneously recognize a same kind of “physiological” beauty. Then they will try to buy it, if they can, driven by the idea that they are not alone, but part of a relatively large number of people who love that artist’s work. That is why – as not only Claudia Cargnel says – the request of certain artworks is extraordinary high, even if the curriculum vitae of the artist has no exhibitions, prizes or bibliography on it. It could be just a trend, due to the internet surfers’ appetite for money, but it may also mean something else. It could be the evidence that social networks, blogs and auction houses’ web sites are now informing art people definitely more than traditional art magazines and museums (generally supported by collectors).

Indeed. One can get a pretty decent education in contemporary art by just reading a few blogs and magazines obsessively. The art world may be getting ready for the next stage of evolution after the rise of the art fair model.

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Written by fabiorojas

January 3, 2014 at 12:06 am

Posted in culture, fabio, markets

post-curator art

I was recently listening to the podcast, Bad at Sports, which covers the contemporary art world. This episode is a long interview with dealer, writer, and provacteur Matt Gleason. A lot of good stuff, but this caught my ear. Gleason claims that one of the major reasons that Jeffrey Deitch was disruptive as director of LAMOCA was that he pursued “post-curator art.” What does that mean? My translation:

Over the last 50 years, the art world has institutionalized. Museums are run by professionals, artists get MFA, and the art market is centralizing around art fairs. What is so disruptive about Dietch was that rejected the institutionalization of the curator – the people who pick art, stage exhibitions, and manage collections.

In other words, in a world of professionalization, Dietch said: “Screw it, my kid can do this.” And he did it. Dietch fired one of the main curators, had celebrities do shows, and curated many shows himself. Very “post.”

 I once asked an art professional what he learned from interacting with Dietch, and he said something like, “I learned that you can hand over an art gallery to teenagers and it’ll work.” Metaphor perhaps, but it captures the spirit. People with degrees don’t have a monopoly over good taste. Gleason notes that this is self-serving. A museum with poor finances, like LAMOCA, might not have the cash for carefully curated shows and it would be easy to have some SoCal celebrity show work. But still, the comment is telling. The art world has institutionalized, but it rests on jello foundations.

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Written by fabiorojas

November 20, 2013 at 12:46 am

mentors vs. sponsors in labor markets

A lot of sociologists buy into the theory of “sponsored mobility,” which means that elites pick who gets the mobility. So I think there should be a lot of sympathy for  recent research showing that mentorship (communicating with more advanced people) does not have an effect on career advancement but sponsors (people who pick you, push you, and get benefit from it) do have an effect. Robin Hanson reviews a book by economist Sylvia Ann Hewett that makes this claim:

In a new book, economist Sylvia Ann Hewlett uses data to show that mentorship, in its classic wise-elder-advises-younger-employee form, doesn’t produce statistically significant career gains. What does however, her research found, is something she has termed “sponsorship”—a type of strategic workplace partnering between those with potential and those with power. … –

And there is an important implication for the study of gender and inequality:

Women are only half as likely as men to have a sponsor—a senior champion at work who will basically take a bet on them, tap them on the shoulder, and really give them a shot at leadership. Women have always had mentors, friendly figures who give lots of advice. They’re great. They’re good for your self-esteem; they’re good for your personal development. But no one’s ever been able to show that they do anything to help you actually move up. …

We find that women in particular often choose the wrong people. … They seek out a senior person they’re very comfortable with. … For a sponsor, you should go after the person with power, because you need someone who has a voice at those decision-making tables. You need to respect that person, you need to believe that person is a fabulous leader and going places, but you don’t need to like them. You don’t need to want to emulate them.

If true, this forces me to modify my views. I have always believed that sponsored mobility is important in academia, but I believe that mentorship matters as well. If Hewett is right, my belief is misplaced. It’s really about sponsored mobility. So, if you care about women or minorities advancing in some career track (like academia), then forget the nice lunches. Administrators should double down on matching people with power players. A bit rude, but it might be one concrete way to chip away at inequality in the leadership of the academy.

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Written by fabiorojas

November 18, 2013 at 3:47 am